July 21, 2011

Effective discussion of Apprendi's application to corporate fines

Thanks to this post at White Collar CrimProf Blog, I see that a District Court in California has issued an interesting and effective opinion in United States v. Au Optronics Corporation, No. C 09-00110 SI (N.D. Cal. July 18, 2011) (available here), concerning tha application of Apprendi to corporate fines. Here are snippets from the ruling:

In light of the fact that the maximum fine in this case will depend upon proof of the gain or loss caused by the conspiracy, the government seeks two related orders from the Court. First, claiming that evidence of the effects of the alleged antitrust conspiracy is irrelevant to the defendants’ guilt, the government requests that the Court bifurcate the trial into a guilt phase and a penalty phase. Second, claiming that criminal fines are exempt from the Supreme Court’s decision in Apprendi v. New Jersey, 530 U.S. 466 (2000), the government seeks an order that the evidence presented in the penalty phase need not be presented to a jury....

Until recently, there would have been little reason to doubt Apprendi’s applicability to fines. Two circuits had applied Apprendi’s holding to criminal fines....[But] last year the First Circuit held that criminal fines were exempt from Apprendi’s rule [based on dicta in the Supreme Court's Ice decision]....

The government argues that this Court should follow the First Circuit. Relying largely on the same reasoning as the First Circuit, it contends that under historical practices fines fell within the sole discretion of the trial judge.... The government argues that this historical practice renders Apprendi inapplicable to the fines in this case.

The Court is unconvinced. As an initial matter, the Supreme Court’s statement in Ice is dicta, made without the benefit of briefing or argument in a case whose facts do not remotely resemble the facts of this case. While, of course, Supreme Court dicta is compelling, losing sight of Apprendi’s mandate based upon one clause in Ice risks losing the forest for the trees.....

The fine in this case is the primary form of punishment the government seeks and could amount to as much as $1 billion, ten times more than the fine authorized by the Sherman Act. The magnitude and primacy of such punishment puts it in a separate class from an ordinary criminal fine imposed against a defendant who faces incarceration. In the Court’s view, this is reason enough to apply Apprendi’s mandate and require a jury to find the amount of gain or loss under the alternative fines statute.

The historical practices the government has cited simply do not seem well suited for the situation before the Court, where incarceration -- or whippings, for that matter -- is not a penalty the Court can impose. The Sherman Act authorizes a maximum fine of $100 million. Should the government wish to go beyond that act’s authorization and seek a significantly larger fine based upon the establishment of additional facts, it must do so by following Apprendi’s mandate, and by proving those facts to a jury beyond a reasonable doubt.